SBA Part Thirty-Eight: SBA Releases New PPP Rules, Including 14-Day Pause on Processing of PPP Loans for Some Employers


On February 22, the Small Business Administration (SBA) released new paycheck protection program (PPP) guidelines and rules that include important changes.

From 9:00 a.m. EST on February 24 until 5:00 p.m. EST on March 9, the SBA will not process any PPP loans for an entity that employs more than 20 people. During this 14-day period, the SBA hopes to strengthen the equitable distribution of PPP funds. However, for many businesses, it will be a two-week timeframe to get a PPP loan, if the business has not already provided its PPP loan application to its bank, and the bank has not. not submitted the application in the SBA system before the morning of February 24. If this deadline is not met, the SBA will automatically reject the loan application.

The number of employees is per individual employee and does not take into account the full-time equivalent (FTE) calculations. Therefore, seasonal, part-time and full-time employees all count as an “employee”, regardless of the number of hours worked. The PPP loan program expires on March 31, 2021.

Some additional and notable PPP changes include:

  1. Borrowers who file a Schedule C now have a revised form. Schedule C filers can calculate PPP loan amounts using gross income (row 7) instead of net income (row 31). In addition, $ 1 billion has been set aside for unemployed Schedule C filers who are in a low to moderate income (LMI) census tract (click on here to determine if the location qualifies as an LMI census tract).
  2. The restriction on student loan debt delinquency has been removed for entities with 20% or more owners who have student loan debt delinquency.
  3. Entities whose owners have committed non-fraudulent crimes can now apply for a PPP loan without any time restrictions.
  4. Owners of entities that only have an IRS tax identification number are eligible for a PPP loan.

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